Skeggi was well pleased with this proposal, and so they went about seeking for a time.  Suddenly, when Grettir least expected it, Skeggi started running with all his might along the moor and picked up the sack.  Grettir saw him bend and asked what it was that he had picked up.

“My sack,” he said.

“Who says so besides yourself?” Grettir asked.  “Let me see it!  Many a thing is like another.”

Skeggi said no one should take from him what was his own.  Grettir seized hold of the sack and they both pulled at it for a time, each trying to get his own way.

“You Midfjord men have strange notions,” said Skeggi, “if you think that because a man is not so wealthy as you are, he is not to dare to hold to his own before you.”

Grettir said it had nothing to do with a man’s degree, and that each should have that which was his own.

Skeggi replied:  “Audun is now too far away to strangle you as he did at the ball-play.”

“That is well,” said Grettir; “but however that may have been you shall not strangle me.”

Skeggi then seized his axe and struck at Grettir, who on seeing it seized the handle of the axe with his left hand and pulled it forward with such force that Skeggi at once let go.  The next moment it stood in his brain and he fell dead to the earth.  Grettir took the sack, threw it across his saddle and rode back to his companions.

Thorkell rode on, knowing nothing of what had happened.  Soon Skeggi was missed in the company, and when Grettir came up they asked him what news he had of Skeggi.  He answered in a verse: 

“Hammer-troll ogress has done him to death.  Thirsting for blood the war-fiend came.  With hard-edged blade she gaped, o’er his head, nor spared she his teeth.  I saw it myself.”

Then Thorkell’s men sprang up and said it was impossible that a troll should have taken the man in full daylight.  Thorkell was silent for a moment.  Then he said:  “There must be something more in it.  Grettir must have killed him.  What was it that really happened, Grettir?”

Grettir then told him all about their fight.  Thorkell said:  “It is a most unfortunate occurrence, because Skeggi was entrusted to my service, and was a man of good family.  I will take the matter upon myself and pay whatever compensation is adjudged.  But a question of banishment does not lie with me.  Now, Grettir, there are two things for you to choose between.  Either you can go on to the Thing with us and take the chance of what may happen there, or you can turn back and go home.”

Grettir decided to go on to the Thing, and to the Thing he went.  The matter was taken up by the heirs of the man slain.  Thorkell gave his hand to pay the compensation and Grettir was to be banished for three years.

On their way back from the Thing all the chiefs halted at Sledaass before they parted company.  It was then that Grettir lifted a stone lying in the grass, which is still known as Grettishaf.  Many went afterwards to see this stone and were astounded that so young a man should have lifted such a mountain.