You shall surely strike the inhabitants of that city with the edge of the sword; you shall devote it and all that is in it and its animals to destruction with the edge of the sword.
English: “All that is in it” — “that is in it” excludes the property of the righteous that is outside it; “all that is in it” includes the property of the righteous that is inside it.
On the daf / in context: Property of the righteous that happens to be inside the condemned city is destroyed, while their property located outside is spared. Rabbi Shimon explains that it was their wealth that caused them to dwell there.
Type of Learning
Derash on the verse (Sanhedrin) — the fate of the property of the righteous inside versus outside the city.
What Is Learned
Property of the righteous that is inside the ir ha-nidachas is destroyed; property of the righteous that is outside is spared.