Depending on the age and remaining dexterity of your grandpa, a Case Peanut might not be the best choice. The springs are kinda stiff, and the pen blade especially loves to bite its owner. Something a bit larger might be better. Texas Jack, perhaps.
Edit: Misread the OP.
The point about the Case Peanut still stands though. Small, very thin blades, and very snappy. I'd suggest an 087 pattern jack (22087 synthetic, 62087 bone, etc) medium jack. Still pretty small and pocketable at 3 3/8" closed (and Old Timer 34 is the same length), but much more practical for use than the Peanut. It's also less likely to get lost, or accidentally take a trip through the washing machine/drier.
Bone is reasonably durable - the biggest issue is impact (drops) can chip or crack the bone. If you like bone, I'd suggest getting something with sharp jigging, because over the years it'll wear down and smooth out in a beautiful way that even Case's popular "pocket worn" jigging can't quite duplicate.
Case does stainless (Tru-sharp) and carbon (their CV). If you want it to last without maintenance, stainless is the obvious choice. Second option would be to get a CV bladed and force the patina.
Apart from Case, I'd suggest finding an old USA-made Camillus, Schrade Old Timer/Uncle Henry , or an older Buck that was made by Camillus. The advantage of these over a Case is better manufacturing and quality, plus you've already got at a least a decade or two added to your story of "this knife is XX years old" when it gets passed down.
3rd option is a Great Eastern Cutlery. More expensive, obviously, and harder to acquire because of the rabid frenzy every time a new one drops. But if you can get one you like for, say, under $150, that extra cost will be a long-term investment that'll hold up for a long time, many years after the initial "sting" of the extra cost.