Finding contact by name

Finding contact by name

I have a contact I'll call John Smith. He is in my contacts as John Smith with an email of jsmith@gmail.com. If I start in the mail client and type "john" in the "To", "CC" or "BCC" fields, nothing comes up. If I type "Smith", nothing comes up. If I type "js" he shows up by email along with other emails that begin with js.

I then click within the left column of the email client, the "Contacts" button. My contacts are shown. I repeat the above test but using the search bar at the top of the contacts, and I get the same results. He can only be found by email address, not by name.

I page down in the contacts until I get to the "J"s and his record is there by name. 

Is this a disastrous bug? A bad setting? What is going on. How do I find my contacts by name?