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I can’t find that story in this translation: https://sagadb.org/brennu-njals_saga.en

Sorry, got my sources wrong. It is actually in Íslendingabók, specifically in Kristni Saga chapter 11.

This little story is so often cited in Iceland you kind of just learn it in your head and only know it is in some of the sagas.

Ah, thanks! Found an English translation [0] which has the story on pp 48–49 (PDF pages 98–99).