Your subject mentions "paths", but your post doesn't. Are the files you're passing as arguments in the same directory as your script?
If your script line is "print file_exist('file.ext');" and the file doesn't exist the function will return boolean "false", which will be cast for display as "" (empty string), thus you won't see anything. If it does exist the function will return true, which will be cast as "1", and you'll see "1" on your screen. If the file exist but is not in the script's directory you'll need to supply the path, of course, in order to get "true".
To get a display either way, do something like this:
if (file_exists('file.ext')) {
echo 'true';
} else {
echo 'false';
}