The name of the Landman who lived in the island was Thorfinn. He was a son of Kar the Old, who had lived there for a long time. Thorfinn was a man of great influence.

When the day broke, the people on the island saw that there were some sailors there in distress and reported it to Thorfinn, who at once set about to launch his large sixteen-oared boat. He put out as quickly as possible with some thirty men to save the cargo of the trader, which then sank and was lost, along with much property. Thorfinn brought all the men off her to his house, where they stayed for a week drying their goods. Then they went away to the South, and are heard of no more in this story.

Grettir stayed behind with Thorfinn, keeping very quiet and speaking little. Thorfinn gave him his board, but took little notice of him. Grettir held rather aloof, and did not accompany him when he went abroad every day. This annoyed Thorfinn, but he did not like to refuse Grettir his hospitality; he was a man who kept open house, enjoyed life and liked to see other men happy. Grettir liked going about and visiting the people in the other farms on the island. There was a man named Audun, who dwelt at Vindheim. Grettir went to see him daily and became very intimate with him, sitting there all day long.

One evening very late when Grettir was preparing to return home, he saw a great fire shoot up on the headland below Audun's place, and asked what new thing that might be. Audun said there was no pressing need for him to know.

"If they saw such a thing in our country," said Grettir, "they would say the fire came from some treasure."

"He who rules that fire," answered the man, "is one whom it will be better not to inquire about."

"But I want to know," Grettir said.

"On that headland," said Audun, "there is a howe, wherein lies Kar the Old, the father of Thorfinn. Once upon a time father and son had a farm-property on the island; but ever since Kar died his ghost has been walking and has scared away all the other farmers, so that now the whole island belongs to Thorfinn, and no man who is under Thorfinn's protection suffers any injury."

"You have done right to tell me," said Grettir. "Expect me here to-morrow morning, and have tools ready for digging."

"I won't allow you to have anything to do with it," said Audun, "because I know that it will bring Thorfinn's wrath down upon you."

Grettir said he would risk that.

The night passed; Grettir appeared early the next morning, and the bondi, who had got all the tools for digging ready, went with Grettir to the howe. Grettir broke open the grave, and worked with all his might, never stopping until he came to wood, by which time the day was already spent. He tore away the woodwork; Audun implored him not to go down, but Grettir bade him attend to the rope, saying that he meant to find out what it was that dwelt there. Then he descended into the howe. It was very dark and the odour was not pleasant. He began to explore how it was arranged, and found the bones of a horse. Then he knocked against a sort of throne in which he was aware of a man seated. There was much treasure of gold and silver collected together, and a casket under his feet, full of silver. Grettir took all the treasure and went back towards the rope, but on his way he felt himself seized by a strong hand. He left the treasure to close with his aggressor and the two engaged in a merciless struggle. Everything about them was smashed. The howedweller made a ferocious onslaught. Grettir for some time gave way, but found that no holding back was possible. They did not spare each other. Soon they came to the place where the horse's bones were lying, and here they struggled for long, each in turn being brought to his knees. At last it ended in the howedweller falling backwards with a horrible crash, whereupon Audun above bolted from the rope, thinking that Grettir was killed. Grettir then drew his sword Jokulsnaut, cut off the head of the howedweller and laid it between his thighs. Then he went with the treasure to the rope, but finding Audun gone he had to swarm up the rope with his hands. First he tied the treasure to the lower end of the rope, so that he could haul it up after him. He was very stiff from his struggle with Kar, but he turned his steps towards Thorfinn's house, carrying the treasure along with him. He found them all at supper. Thorfinn cast a severe glance at him and asked what he had found so pressing to do that he could not keep proper hours like other men.

"Many a trifle happens at eve," he replied.

Then he brought out all the treasure which he had taken from the howe and laid it on the table. One thing there was upon which more than anything else Grettir cast his eyes, a short sword, which he declared to be finer than any weapon which he had ever seen. It was the last thing that he showed. Thorfinn opened his eyes when he saw the sword, for it was an heirloom of his family and had never been out of it.

"Whence came this treasure?" he asked.

Grettir then spake a verse:

Thorfinn said: "You don't seem to take it very seriously; no one ever before had any wish to break open the howe. But since I know that all treasure which is hidden in the earth or buried in a howe is in a wrong place I hold you guilty of no misdeed, especially since you have brought it to me."

Grettir answered:

"You have spoken well," Thorfinn answered. "But before I can give you the sword you must display your prowess in some way. I never got it from my father whilst he lived."

Grettir said: "No one knows to whom the greatest profit will fall ere all is done."

Thorfinn took the treasure and kept the sword in his own custody near his bed. The winter came on bringing Yule-tide, and nothing more happened that need be told of.