I think the most important thing here is "why"?
If you submit a picture which you know isn't yours to a competition in order to win, you are both defrauding the competition and being duplicitous to your friend.
However, if the local paper runs a pretty baby contest, and they stuck it in without thinking for a laugh... then it's pretty harmless.
I'm pretty happy for people to play with my photos, reproduce them, edit them, repost them here on the internet..... but I get narky if they pretend it's their work, or try and profit from my generosity.
I wonder which case it was?
Rob