Short answer. Only if you are solvent. Under Article 1886, where there is a stipulation that the agent shall advance the necessary funds, he is bound to do so — except when the principal is insolvent. So your agent must front the money he agreed to advance, but the duty falls away once you have become insolvent.
What the law says
Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so except when the principal is insolvent.
Civil Code, Article 1886 — Duty to Advance Funds. Read the full provision →
The duty to advance exists only if agreed
By default, an agent does not have to spend his own money to carry out the agency — funding the business is the principal's job. That changes only if the parties agree otherwise. Article 1886 provides that should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so. So the obligation to front money comes from the contract, not from the nature of agency. Where the agent expressly agreed to advance the funds needed for the task, he must do it, and cannot refuse to proceed on the ground that the money should come from the principal.
The insolvency exception
Even where the agent agreed to advance the funds, the duty has a limit: except when the principal is insolvent. If the principal has become insolvent, the agent is no longer bound to put in his own money. The reason is fairness and common sense. An agent who agreed to advance funds did so expecting to be reimbursed by the principal, as the law of agency provides. If the principal is insolvent, that expectation collapses — the agent would be pouring his money into a venture with little prospect of getting it back. So the law releases him.
The agent's reimbursement, and why it matters here
This ties into the agent's broader right to be repaid. An agent who lays out money to carry out the agency is entitled to reimbursement from the principal, with interest, for what he advanced in the principal's service. The duty to advance funds under a stipulation is the flip side of that right: the agent fronts the money and looks to the principal to make him whole. The insolvency exception protects the agent precisely because it protects the mechanism — reimbursement — that makes advancing funds tolerable in the first place.
For principal and agent
If you are a principal relying on your agent to advance the funds, understand two things: the duty exists only if it was actually stipulated, and it ends if you become insolvent. You cannot force a solvent-agent-funded operation once you can no longer repay him. If you are the agent, check whether you truly agreed to advance funds before assuming you must; and if the principal has become insolvent, you are not bound to keep laying out your own money. In either case, keep clear records of what was advanced and the principal's financial state, because both the duty to advance and the right to be reimbursed turn on those facts.