Same here: 1.4.2. too. Vanilla, no mods.
Yesterday I got a deliver herd quest. I could not refuse, as the herd should be delivered to a NPC in a town I planned to go - I own a workshop there. Well, I took the herd, went to the town - but the NPC wasn't in there. Not shown as in the town, or the Tavern, or the keep, or in the dungeon. I searched him in the city - could not find him, asking people didn't help (they offered me to find my companions or other merchants, but not that NPC. The magical "n" told me the NPC would be there... but where could he've been hidden? Quest failed, and peasants and herd disappeard (I'd liked to keep at least the herd for my troubles)
Or is it a bug? I guess he might have been the previous owner of my workshop, but in that case, he shouln't be the recipent of the "deliver herd"-quest after he sold his workshop and left town (I bought the workshop long before accepting the quest).