There will be a Waterfall near outside Holy Village. Go inside. Go all the way to the left side of the cave. You will find a big angel statue. Talk to it. After that, go to the North end of the cave to get elf's tear. Now go back to Holy Village. Talk with the Antique Merchant in the house near the Item Shop in Holy Village and activate the quest.
Needed: Elf's Tear*1