The code works perfectly with multiple space, you input 
sam    i        am.
and it gives the proper output. I am pretty sure my code works fine so must be an error in the checker. Any idea? 
package com.codegym.task.task08.task0823;

import java.io.BufferedReader;
import java.io.IOException;
import java.io.InputStreamReader;

/*
Going national

*/

public class Solution {
    public static void main(String[] args) throws IOException {
        BufferedReader reader = new BufferedReader(new InputStreamReader(System.in));
        String s = reader.readLine();
        boolean toCap = true;

        //write your code here
        for (int i = 1; i < s.length(); i++) {
            String sp = s.substring(i-1,i);
            if (toCap){
                s = s.substring(0,i-1) + sp.toUpperCase() + s.substring(i,s.length());
                toCap = false;
            }

            if (sp.equals(" ")){
                toCap = true;
            }

        }
        System.out.println(s);
    }
}