SQL Uppercase First Char in Lastname using For XML Path?

This query never returns Cap (first char) when using 'For XML Path' in my example below.

Stuff ((SELECT Upper(Substring(ci.last_name, 1, 1)) + Lower(Substring(ci.last_name, 2,50))
	   FROM Contact_Info as ci
	   WHERE (ci.id = dbo.Contractors.id) FOR XML path('')), 1, 1, '') AS [LastNames]

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Note: The same 'Upper/Lower' syntax work fine in this simple query:

SELECT Upper(Substring(ci.last_name, 1, 1)) + Lower(Substring(ci.last_name, 2,50))
FROM tblContact_Info as ci

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Note: I've also used this function instead of the Upper syntax above, and it still returns ALL lowercase...

ALTER FUNCTION [dbo].[ProperCase]
(
  @string varchar(8000)
)
returns varchar(8000)
AS
   BEGIN
      set @string = lower(@string)
      declare @i int
      set @i = ascii('a')

while @i <= ascii('z')
begin

set @string = replace( @string, ' ' + char(@i), ' ' + char(@i-32))
set @i = @i + 1
end

set @string = char(ascii(left(@string, 1))-32) + right(@string, len(@string)-1)

return @string

End
go
grant execute on propercase to public
go