I brought second hand iphone4 but i cannot open it because the owner forgot her apple id and password, how can i reformat this without reformating my phone outside?

I brought second hand iphone4 but i cannot open it because the owner forgot her apple id and password, how can i reformat this without reformating my phone outside? what can i do to open this? its till on the set up mode

There is nothing you can do about but ask the seller for your money back.  Without the previous owners applid password, you cannot activate and use that device - there is no way around that.  iOS 7's Activation Lock needs to be disabled by the previous owner in order for you to use it - if they cannot (or willnot) produce the password to disable it, you have no options.
They can disable it remotely for you - see http://support.apple.com/kb/HT5661 but not if they do not remember their own password.

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