At 05.20 hours on 10 Jun, 1942, U-68 spotted two steamers in a line northeast of the Panama Canal and fired at 06.17 hours a spread of three torpedoes at the first ship, scoring two hits on Surrey which stopped but did not sink. At 06.20 hours, a torpedo was fired at the second ship, the Ardenvohr, which sank within 8 minutes after being hit. The Germans then questioned the survivors from both ships and fired at 07.04 hours a first coup de grâce at Surrey that was a dud, but a second torpedo at 07.22 hours hit aft and caused the ship to sink by the stern.
Shortly afterwards a crew member from Surrey was spotted alone, clinging to a buoy and was taken aboard U-68, but about 20 minutes after the ship sank a heavy underwater detonation lifted the U-boat up and caused temporary damage to the rudders, a battery, the periscope and the torpedo firing control. The very grateful man was then placed aboard a lifeboat from Ardenvohr before the Germans left the area for repairs and to reload the torpedo tubes.

Ten crew members and two gunners from Surrey (Master Frederick Lougheed) were lost. The master and 34 survivors were picked up by Resolute and transferred to USS Edison (DD 439), 20 survivors by Flora and the Panamanian steam merchant Potomac and landed at Colon and Cristobal.