Pl/pgsql function fails when false

The following pl/pgsql function looks in a particular table (arg1) under a particular attribute (arg2) if a particular
valueexists (arg3) and returns true/false accordingly. The following implementation returns true if element is found,
butfails with "ERROR:  control reaches end of function without RETURN" if it isn't found instead of returning false. 

CREATE FUNCTION myexists(varchar(20),varchar(20),int4) RETURNS bool AS
'DECLARE
    query text;
    tmp RECORD;
    tabname ALIAS FOR $1;
    colname ALIAS FOR $2;
    value ALIAS FOR $3;
BEGIN
    query := ''SELECT * FROM ''||quote_ident(tabname)||'' WHERE ''||quote_ident(colname)||''=''||quote_literal(value);
    FOR tmp IN EXECUTE query LOOP
        IF NOT FOUND THEN
            RETURN ''false''::bool;
        ELSE
            RETURN ''true''::bool;
        END IF;
    END LOOP;
END;' LANGUAGE 'plpgsql';

So it seems it's neglecting the "RETURN ''false''::bool" statement

I made it work in the end as:

CREATE FUNCTION myexists(varchar(20),varchar(20),int4) RETURNS bool AS
'DECLARE
    query text;
    tmp RECORD;
    tabname ALIAS FOR $1;
    colname ALIAS FOR $2;
    value ALIAS FOR $3;
BEGIN
    query := ''SELECT * FROM ''||quote_ident(tabname)||'' WHERE ''||quote_ident(colname)||''=''||quote_literal(value);
    FOR tmp IN EXECUTE query LOOP
        IF NOT FOUND THEN
            EXIT;
        ELSE
            RETURN ''true''::bool;
        END IF;
    END LOOP;
    RETURN ''false''::bool;
END;' LANGUAGE 'plpgsql';

Any ideas why the one would fail while the other would work?


cheers,
thalis