Despite the illusion that he was a model landlord and landowner, Sir Hugo Melmoth wasn't the harmless eccentric that people were left to believe. He was a ruthless tyrant who invented his own religion as a cover for his rapacity and greed, and made human sacrifices of those who stood in his way.
On the 23rd of June 1802, having enough of his tyranny, the villagers trapped him and threw him into the flames. The only mention of his death in the records said that he jumped in the flames to be reincarnated like the phoenix.
Later in the episode, it is revealed that Lorna Soane is his descendant. She reveals to be very fond of Sir Hugo and his pagan rituals as a form of worship. However, this ends at the ceremony that marked the anniversary of his death when Carole Latimer tries to kill Luke Altman.