Let center be $C=(h,k)$ and point of contact $P=(1,2)$. The radius is perpendicular to the tangent.
Tangent slope: $-3$; radius slope = $\frac{k - 2}{h - 1}$
\[
\frac{k - 2}{h - 1} \cdot (-3) = -1 \Rightarrow 3(k - 2) = h - 1 \Rightarrow h = 3k - 5 \quad \text{(1)}
\]
Radius = $\sqrt{(h - 1)^2 + (k - 2)^2} = \sqrt{10}$
\[
(h - 1)^2 + (k - 2)^2 = 10 \Rightarrow (3k - 6)^2 + (k - 2)^2 = 10 \Rightarrow 10(k - 2)^2 = 10 \Rightarrow k = 3 \text{ or } 1
\]
Now plug into $h^2 + hk + k^2 = 37$:
\[
\text{If } k=3,\ h = 4,\ h^2 + hk + k^2 = 16 + 12 + 9 = 37 \quad (\text{Correct})
\]
\[
\text{If } k=1,\ h = -2,\ h^2 + hk + k^2 = 4 - 2 + 1 = 3 \neq 37 \quad (\text{Incorrect})
\]
So $k = 3$