Publish the paper without letting know one of authors? I and one of my peers prepared a journal paper out of his master thesis. We submitted it first to one of the well-known conferences of the field and it got accepted and we let the other coauthors know (including his professor, who is a prominent researcher in his field). They seemed to be very satisfied.

Later we decided to extend the paper and I submitted it to a journal. I was not aware that he had not told the others about the submission. The paper was accepted by the journal. This time my peer refuses to make his professor aware.

Now I wonder about proceeding with the publication? Is it ethical? What are the consequences if I finalize the publication, for me?
One must not submit a paper for publication without the consent of all coauthors. In my experience, most submission systems will point this out explicitly, but it remains true regardless of such notice.

It seems that for the first submission to a conference, your coauthors retroactively consented (maybe grudgingly, maybe happily). Nevertheless, you should have asked before -- not just informed, by the way.

You then committed the same infraction again, and submitted to a journal without everyones prior consent. Going ahead with the publication without your coauthors consent would be even worse (drastically so!) than the mere submission, so this is not an option. Your professor coauthor would almost certainly find out.

The appropriate step for damage control is to contact all coauthors immediately, apologize profoundly for your mistake, and ask them whether they want to go ahead with the publication. If everyone agrees, go ahead (and never do this again). If someone disagrees, you need to withdraw your submission and apologize to the editor (and indirectly referees) for wasting their time.