This paper deals with the suit for cancellation which is a legal way for protection of previous owner against the improper, untruthful recording of ownership. All the procedural assumptions necessary to file this lawsuit, in accordance with the Land Registry Act and the Civil Procedure Act, including active and passive legitimacy, time limits within which a lawsuit can be filed, specificity in relation to the rights of actual service etc. are analyzed. Since there are differing opinions of the authors, legal nature of suit for cancellation is also discussed. The theoretical parts of this paper are supported by the extensive practice of the Courts of the Republic of Croatia and here has also been elaborated case law which has formed new groundstands in the absence of legal provisions. Particular emphasis is placed on the principle of protection of trust in land registers and good faith, and in this respect, the recent practice of the Supreme Court of the Republic of Croatia in the Rev-602 / 14-2 judgment was analyzed in detail. In particular, the emphasis has been put on establishing a balance between the legal provision that prescribes that no one is obliged to investigate the external state of affairs and conduct in good faith. The question arises; in which cases it may be considered that the acquirer could know or had sufficient reason to suspect that what was entered in land registers different from the state of the outside.