  We present a theory of spin and orbital states in Mott insulator $LaTiO_3$.
The spin-orbital superexchange interaction between $d^1(t_{2g})$ ions in cubic
crystal suffers from a pathological degeneracy of orbital states at classical
level. Quantum effects remove this degeneracy and result in the formation of
the coherent ground state, in which the orbital moment of $t_{2g}$ level is
fully quenched. We find a finite gap for orbital excitations. Such a disordered
state of local degrees of freedom on unfrustrated, simple cubic lattice is
highly unusual. Orbital liquid state naturally explains observed anomalies of
$LaTiO_3$.
