It appears at random along with a Heart Piece and a few other items. In the Auction House, you may have to quit out and re-enter a few times to get the Swift Sail to appear.
He's dressed in disco frills - show him the Wind Waker and he'll teach you the song. Don't have the Song of Passing? No problem, you can learn it from the man in Windfall on the top of the northwestern hill. Head back to Windfall and enter the Auction House on the right side of the main stairway leading up into the city - the Auctions only take place at night, so you'll need to change the time of day by playing the Song of Passing.
