Question: Reading Height on Mud Tire Sidewall

Have seen two conventions on sidewalls for tire measurement. Here are two examples: 325/45R24 for street tires and 37x13.50R17LT for mud tires. Tire manufactures routinely explain the first convention which would be width 325 mm, aspect ratio 45 mm and rim diameter 24 inches. However, I can't find an explanation of the mud tire convention above. I've been told that the 37 is tire height (inches), the 13.50 is rim width (inches) and the 17 is rim diameter (inches). A coworker showed me a diagram explaining that the tire height is actually the diameter of the tire from its outer edge diagonally across the tire to the opposite outer edge as if the tire were standing at a slight angle. For the example above, I thought the height listed on the mud tire would be 37 inches tall unloaded and measured as if the tire were standing flat on the ground. My used 37 inch mud tire measures 36.1 inches tall but diagonally it appears to be 38.3 inches in diameter. What does the sidewall mean when it says 37 inches? Is it the height when the tire is standing vertical flat on the ground or is it the diameter when it is standing slightly diagonal which would give a bit more height to the tire?