There are two houses on the left, each with three monsters. This book is in the first room on the left.
Look at the table on the left after entering the cabin, and you will know when you get closer.
Extended data:
Task Name: Knowledge Test
Mission statement: Find the source of death and give it to Pacova Fintaras in undercity.
Task demand: the origin of the undead
Mission description: I will tell you what you are looking for, and I will ask you my questions, but I am not doing this because you want to prove yourself. Knowledge is far more important than strength. Even if others are more capable than you, your knowledge of the world will make you better. Take a trip to the monastery in the northern part of Tirisfa woodland. There is a book in the library there called The Origin of the Dead, which is used by fallen paladins against us.