I think that as it's some years ago, it would be ok. I would explain to your friend how much you love the name, your grandad, etc
We used a name for my second son that a (not so close, rarely ever see one another) friend used about 5 or so years ago. We didn't tell her or anything, just used it, but obviously for you thats different.
If not then I'm sure it would be lovely as a middle name. Samuel is a great name, fwiw.
FWIW I would be a tad miffed if my best friend called her child the same name as hers. I wanted Ruby for a girl but a friend had a Ruby 6 days before I had my child, No way was I going to call her that.
I would run it by her if you think she won't mind you using it.
Then you have her blessing if you decide to use it.
Tbh, as time goes by and with the more children you have, so many names get used up by friends/family/colleagues along the way that there has to be some sort of overlap of names at some stage. Not every name can be unique in your circle.