Thank you for your reply and information. I also found another resource that matches your info and that UB3 is a red herring. While my grandfather's cigarette case says "Ub 3", it is U3. I was thrown off a bit because the current description of U-3 history and fate on uboat.net is incorrect, in that uboat.net states U3 never saw service and surrendered in 1918. As you point out, U-3 indeed saw action and was sunk in 1915.

This also matches family history in that following the sinking, my grandfather was taken prisoner and spent the duration of the war as a POW in Italy. This explains why he was never promoted. The record of the U3 sinking is also described in the book "Austro-Hungarian Warships In Photographs, Vol. 2. 1896-1918" by Baumgartner & Sieche, translation courtesy of Erwin Sieche. Via another source, I found some old information from Mr. Sieche specifically regarding my grandfather's service.

Specifically, in this book, the fate of U-3 in this book is described as: “U 3 (Strnad) attacked the Italian auxiliary cruiser Città di Catania in the Otranto Straits, was damaged by the enemy ship when it tried to ram the boat, and discovered the following morning by the French destroyer Bisson which sank the damaged boat through gunfire (7 dead)”;

Additional information is that the U3 was sunk at approximately 41 degrees North, 18 Degrees 15 Minutes East on 13/8/1915.

My grandfather was Hungarian and went on to serve the US Navy in the Pacific in World War 2, initially as a coastal freighter Master (MV Lorinna) supplying allied coastal watchers in islands south of Australia. He subsequently served in the Navy's MSTS as a Heavy Lift Transport Master (USNS Marine Fiddler) until the early 1960s and was active in supplying forces during Korea and Vietnam.

Again, thank you very much! You have helped me fill in a big hole in our family history.