Ser Alvard's Missing Sword is a quest from the merchants' guild board in the City of Amaranthine. You cannot find the sword if you do not have the quest in your journal.
Background
Many years ago, Ser Alvard had a sword made for him in the Blackmarsh. He asked that it be shipped to Amaranthine hidden in a crate of ordinary goods, but the crate never arrived. Ser Alvard is likely dead by now, but the blade might remain. The sword may also be dropped randomly after fighting the Avvar Crypt Lord beneath Vigil's Keep in the quest The Wraith's Vengeance.
Walkthrough
The sword is found in the crates at the docks behind Baroness's castle.